December 1, 2009 - Deadline for First Time Homebuyer Tax Credit

The deadline to purchase your first home and qualify for the First Time Homebuyer Tax Credit is fast approaching. Your home must be purchased by December 1, 2009; this means you must CLOSE on your purchase on or before this date. The American Recovery and Reinvestment Act of 2009 increased the ceiling on the tax credit from $7,500.00 in 2008 to $8,000.00 in 2009; making this the ideal time for first-time homebuyers to purchase a home. Additionally, the credit does not need to be paid back as long as you continue living in the home as your primary residence for 3-years without selling it!

A Tax Credit is a dollar for dollar savings on your taxes. Think of it as a gift certificate used to lower your tax bill to the IRS. This makes the offering much more exciting than a tax deduction; which reduces your taxable income but does not directly reduce your tax obligation.

Here are some key points to remember:

• The credit amounts to 10% of the purchase price not to exceed $8,000.00


• A First-Time Homebuyer is defined as someone who has not owned a home in the last 3-years


• No repayment if you live in the home as your primary residence for 3-years


• Single tax payers with incomes up to $75,000.00 per year and married couples with a combined income up to $150,000.00 per year qualify for the full tax credit


• If you are married, both spouses must be first-time homebuyers


• You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendant (child or grandchild); however, you can qualify for the credit if you purchase from siblings, nephews, nieces, and others


• If more than one unmarried individual is purchasing the home, the credit can be split up; however, the combined total cannot exceed the ceiling of $8,000.00


• Home MUST transfer on or before December 1, 2009 in order to qualify

To ensure compliance with requirements imposed by the Internal Revenue Service, we inform yo that any U.S. Federal tax advice contained in this communication (including any attachments or links) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties, or (ii) promoting, marketing, or recommending to another person any transaction or matter addressed in this communication. I recommend that you counsel with properly licensed legal, tax and investment advisors for specific advice pertaining to your personal situation.